January lo, 1903.
RECORD AND GUIDE.
37
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ito&iiO TO RpJkL EsTWE. BihLoij/g A.RC'ifrrEcmn^ ,h(mjsnJou) DEOCntftiiDiJ.
Busitfeas aiId Themes of GeHer^ lKTCRp3-ii
PRICE PER YEAR IN ADVANCE, SIX DOLLARS
Pabtlshed eVerp Satardag
Communications should be addressed to
C. W. SWEET. 14-16 Vesey Street, New Yortt
1. T. LINDBET, Business Manager Telephone. Cortlandt 3157
"Entered at the Post Office at New York, N. Y., as second-class matter."
NO. I)il7.
Vol. L,XXI.
JANUARY 10, 1903.
Real Estate and Building in 1902.
AN EXPLANATION OF THE PECULIAR CONDITIONS WHICH
HAVE PREVAILED IN THE REAL, ESTATE AND BUILDING
TRADES DURING THE PAST YEAR.
The two salient facts about the course of real estate trans¬
actions in 1902 are (1) tliat it lias been the most active year
in the history of the market, and (2) that this activity has
been more than ever controlled by expert
. professional methods and knowledge. The un-
_, ^ ,,â– precedented activity is a fact which is easily
„ . established. The accompanying table shows
^ , „, . , the number of conveyances recorded in the
Real Estate, _ , „ , . ^ ,o,„.
Register s office during every year from 1S90
to and including 1902, the total amount in¬
volved by these transfers, the number which carried only
nominal considerations, and the average value involved by
each transfer.
.S"0 it
Year, con- Amount No.
veyances. involved. nominal. Average.
1002............. 17.260 $137,562,422 11,614 $-J4,;W0
11)01............. 15,019 l.>0,413,052 8,7S8 21,01X1
\.:f.s\)............. 14.5ST 114,243,112 8,073 17,800
1809............. 15,623 130.317,427 - 8,046 17,iW)
latlS............. 14,<'y7 1U4,U1jO,5S1 7,556 lo.OOil
Ihyr............. 14,9SS 111,2.32,874 8,072 16.08:!
last;............. 14,072 132,022.002 7,434 19,070
1895............. 14,040 151,9158,784 6,872 20,938
1894............. VA.-i-'-H 149,U14,S43 5,705 19,352
1893............. 13,244 216,825,732 4,963 2u,]S.-i
IftO^............. 13.944 228,60H,i)99 4,458 24.699
1891............. 14,013 2.31,908,649 4.0-)8 23,2!!.',
1590............. 15,857 282,047,609 4,042 23,S7t
It will be seen that during 1902, 17,265 conveyances were re¬
corded, which is at least 1,300 more than have been recorded
in any previous year. The year which most easily approaches
the total of 1802 is 1901 with 15,919, but in order to obtain the
third year in the list, we have to go back to 1890, which follows
hard upon 1901 with 15,S57. The year next in order is 1S99,
which is only a few hundred behind 1890. The extraordinary
fact about the large increase of the present year, which amounts
to 8 per cent, over the year previous, is that macy causes, which
ordinarily provoke real estate transactions have been less than
usually operative during the past year. The number of in¬
dividual tenements, apartment-houses and residences erected
during 1902 was, lumping them all together, probably only about
a third of the average of the past ten years, the consequence
being that the number of parcels sold before and after improve¬
ment with these classes of houses was much less than usual.
On the other hand there were equally unusual conditions which
helped to increase the number of conveyances in certain dis¬
tricts of the city. Tbe Pennsylvania and New York Central tun¬
nels were probably responsible directly and indirectly for fully
one-half of the increased number of transfers recorded in 1902
over 1901. Moreover, the liveliest Itind of speculation has
been taking place in property situated in the central part of
the city, and to the east of Central Park. Finally business
.property all over the city has been exceptionally active. These
various sources of increase, taken together with a fair demand
for old residences and tenements, have more than counter¬
balanced the sources of decrease mentioned above.
While the number of transactions recorded during 1902 is
unprecedented, the same remark cannot be made of their char¬
acter. The year of 1902 has for the most part been a con¬
tinuation of the year previous. The areas of activity have been
for the most part the same, as have been the nature of the
operations. These operations have been in large measure, as
we have already remarked, speculative in method and purpose.
They have, looked toward the transformation of the middle
and lower parts of Manhattan, and have been based upon an
expectation, which has so far been steadily realized, of an in¬
crease in prices due to the increased demand for space ia those
districts. The areas embraced by this speculation are too
familiar to need very considerable description. They include the
whole of the financial district, the upper end of the wholesale
district, extending as far north as 23d street, the whole length
of Broadway, from 14th street to SOth st, including the side
streets in the neighborhood of Greeley and Long Acre squares,
the whole length of 5th avenue, as far north as 9Gth street, and
all the side streets north of 34th street, between Sth and Lexing¬
ton avenues. In every one of these localities prices have been
advancing steadily throughout the year. In many cases they
have more than doubled since 1S99; and they are still on the
rise. It cannot be said, however, that as yet there has been
any very manifest inflation. Except in a few instances, the
speculative demand is sustained and encouraged by the prices
which people who want to use the property will pay. In the
financial district, for instance, the realty corporations could not
have bid prices up to their present level, had not large cor¬
porations like the Mutual Life, or banking houses like Speyer
& Co., Kean, Van Cortlandt & Co., Blair & Co., and othea's,
been willing to pay prices equally as large, if not larger. The
speculators and speculative corporations have been so far riding
easily upon the wave of business prosperity.
Bat although the demand for use has beei. excellent, the same
thing cannot be said of the demand for investment. During
the fall of 1902 residential property in Manhattan undoubtedly
has offered more tempting opportunities for investors than at
any time since the increase of taxes resulting from consolida¬
tion, the reasons being both that the tax burden was about to
be in some measure lightened, and that from one cause or an¬
other the supply of residential accommodation has fallen behind
the demand. The improved income returns have stimulated a
certain small amount of investment buying; but tbe increase
has not been considerable. Real estate has undoubtedly fallen
into dispute with the general investor, who only occasionally
appeai-s in the market as a buyer. The great mass of the trans¬
actions are purchases either for speculation or for use.
This brings us to the second salient fact about real estate
conditions during the past year, the fact, viz., that more than
ever before the market is dominated by expert professional
operations. Here again the year 1902 has
'only fulfilled the promise of 1901. There is
no way of precisely measuring tbe speculative
interest at any particular time. Indeed, about
the only indication we have, which is in tho
least statistical, is the proportion which the
number of transfers at nominal considerations
bears to tbe total number of conveyances. This indication is
vague, because the large number of papers filed for more or less
technical legal purposes, rarely carry with them an express
consideration, but since papers of this character are a pretty
constant quantity, it is obvious that any great variation iu the
number of transfers at a nominal price must be due to other
causes. As a matter of fact the proportion of these transfers
to the total number has been increasing for years. In 1S68,
out of 10,070 deeds, only 592 or less than 6 per cent, failed to
give the price paid for the property. Ten years later, in 1878,
out of e,S61 deeds, 1,927 or 27 per cent, contained nominal con¬
siderations. By 1S8S this percentage hL=d not increased, but had
fallen slightly to about 24 per cent. Thereafter, however, it
increased rapidly. By 1893 the conveyances at nominal con¬
siderations bad reached 37 per cent, of the number in which the
consideration was expressed. By 1S97 it had amounted to more
than 50 per cent., in 1901 to almost 60 per cent., while during
the past year, almost two-thirds of the transfers came under this
head. At the present rate of increase, in this class of papers,
it will soon be only deeds given by executors and trustees
which will contain express considerations, for the policy of
assessing at full value will doubtless make purchasers still more
eager to conceal the prices they have paid.
There can be little doubt that the increase of transfers at
nominal considerations noted above corresponds pretty well
with the increase in the speculative interest in the real estate
market, and unless we are very much mistaken this increased
predomiuanee of speculative methods and purposes in real estate
operations has a great deal to do .with the comparative lack of
Interest with which investors now regard ix-.-il e3t:ite. 'l"lie
ownership of real property carries with it much greater cares
and responsibilities than does the ownership of personal
property, and for these responsibilities tbe real estate investor
has been in the past compensated by a certain increase In
value upon which he could count. He generally received, not
only a decent income upon his investment, but he had every
reason to expect that at the end of ten or fifteen years, he would
be paid for the trouble he had taken by a substantial addition
Tlie Increasing
Speenlative
Element
in the
Real Estate
Market.